Opinion: Editorials

A pot of gold? Fits and starts in marijuana market

We heard through the grapevine that many locals were celebrating a big day this week. President's Day!

Oh, and two recreational marijuana shops opened in Boulder County.

Sporting new business licenses, Karing Kind, in Boulder County, opened to the general public on Tuesday morning; Terrapin Care Station, at the corner of Canyon Boulevard and Folsom Street, opened in the City of Boulder a few hours later. About a half-dozen more are on track to gain licenses soon.

By most accounts, the legalization process has gone smoothly. Out of towners and medical marijuana customers were among the first to check out this brave new world.

When it comes to the finances in the marijuana industry, however, there is a mix of good and bad news.

First, the good.

Retail sales began Jan. 1 in Colorado. Reportedly, sales have been strong, though we won't have the exact figures until next month. But people who have wanted to buy marijuana legally have had a chance to do that; the sky didn't fall and there weren't any known major crimes or crashes or cartels.

In fact, the governor's office issued a report and a budget that seemed quite optimistic. Gov. John Hickenlooper's administration anticipates sales and excise taxes next year will net the state $98 million, including the lower taxes that are paid by medical marijuana card holders. That is significantly higher than the $70 million that was initially expected.

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So, business is good. Even better: While some people who buy marijuana never had an interest in breaking the law, anecdotally, a whole lot of them have been marijuana users in the past. It's a "new" industry only officially. Any weakening of a black market and the whole host of problems it presents — which far exceed its tax-free status — is a good thing for Colorado.

Hickenlooper also announced what he would like the state to do with those taxes. Spending on youth prevention and health initiatives sound like good ideas.

But then, there's the bad: There is no way for this burgeoning industry to operate unless the businesses have access to banks and the other services that all businesses rely upon. A city-issued license is all well and good; but loans, rent, investments, payrolls and taxes need financial services. Cash-only businesses also invite a criminal element, which we're trying to circumvent by legalizing recreational purchases.

Attorney General Eric Holder said the Obama administration will soon offer guidelines for banks in Colorado and Washington, which also legalized recreational marijuana.

Colorado's largest banks have said they won't offer new loans to property holders with marijuana operations. To put their fears succinctly: They don't want the federal government to swoop in and seize assets they have an interest in.

Michael Elliott, the executive director of the Marijuana Industry Group, thinks the state should intervene: " We also believe there is a role for the state in solving the banking crisis — whether that is through setting up a state bank, creating a task force, or some other means. The banking issue is creating a grave public safety problem and if Congress refuses to act, the state must take action."

Public health is important. So is public safety. The governor should heed the industry's request.

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